MAXTOR CORPORATION $300,000,000 AGGREGATE PRINCIPAL AMOUNT 2.375% CONVERTIBLE SENIOR NOTES DUE 2012 Purchase Agreement dated as of August 9, 2005
Execution Copy
EXHIBIT 10.1
MAXTOR CORPORATION
$300,000,000 AGGREGATE PRINCIPAL AMOUNT
2.375% CONVERTIBLE SENIOR NOTES DUE 2012
dated as of August 9, 2005
TABLE OF CONTENTS
| Page | ||||||||
| Section 1. | Representations and Warranties of the Company | 2 | ||||||
| (a) | No Registration | 2 | ||||||
| (b) | No Integration | 2 | ||||||
| (c) | Rule 144A | 2 | ||||||
| (d) | Offering Memorandum | 3 | ||||||
| (e) | The Purchase Agreement | 3 | ||||||
| (f) | The Indenture | 3 | ||||||
| (g) | The Notes | 3 | ||||||
| (h) | The Conversion Shares | 4 | ||||||
| (i) | Authorization of the Registration Rights Agreement | 4 | ||||||
| (j) | No Material Adverse Change | 4 | ||||||
| (k) | Independent Accountants | 4 | ||||||
| (l) | Preparation of the Financial Statements | 4 | ||||||
| (m) | Incorporation and Good Standing of the Company and its Subsidiaries | 5 | ||||||
| (n) | Capitalization and Other Capital Stock Matters | 5 | ||||||
| (o) | Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required | 5 | ||||||
| (p) | No Material Actions or Proceedings | 6 | ||||||
| (q) | No Labor Disputes | 6 | ||||||
| (r) | Intellectual Property Rights | 6 | ||||||
| (s) | All Necessary Permits, etc. | 6 | ||||||
| (t) | Title to Properties | 7 | ||||||
| (u) | Tax Law Compliance | 7 | ||||||
| (v) | Company Not Required to Register As an Investment Company | 7 | ||||||
| (w) | Insurance | 7 | ||||||
| (x) | No Price Stabilization or Manipulation | 7 | ||||||
| (y) | Related Party Transactions | 8 | ||||||
| (z) | Recent Sales | 8 | ||||||
| (aa) | No General Solicitation | 8 | ||||||
i
TABLE OF CONTENTS
(continued)
(continued)
| Page | ||||||||
| (bb) | No Directed Selling Efforts | 8 | ||||||
| (cc) | Company’s Accounting System | 8 | ||||||
| (dd) | Compliance with Environmental Laws | 8 | ||||||
| (ee) | Compliance with Laws | 9 | ||||||
| (ff) | Securities Exchange Act of 1934 | 9 | ||||||
| (gg) | Compliance with ERISA | 9 | ||||||
| (hh) | UK Stabilising Rules | 10 | ||||||
| (ii) | No Unlawful Payments | 10 | ||||||
| (jj) | No Prohibition of Dividends | 10 | ||||||
| (kk) | Compliance with Money Laundering Laws | 10 | ||||||
| (ll) | Regulated Foreign Assets | 10 | ||||||
| (mm) | Statistical and Market-Related Data | 10 | ||||||
| (nn) | ▇▇▇▇▇▇▇▇-▇▇▇▇▇ | 10 | ||||||
| Section 2. | Purchase, Sale and Delivery of the Notes | 11 | ||||||
| (a) | The Firm Notes | 11 | ||||||
| (b) | The First Closing Date | 11 | ||||||
| (c) | The Optional Notes; the Second Closing Date | 11 | ||||||
| (d) | Payment for the Notes | 12 | ||||||
| (e) | Delivery of the Notes | 12 | ||||||
| Section 3. | Additional Covenants of the Company | 12 | ||||||
| (a) | Representative’s Review of Proposed Amendments and Supplements | 12 | ||||||
| (b) | Amendments and Supplements to the Offering Memorandum and Other Securities Act Matters | 13 | ||||||
| (c) | Copies of Offering Memorandum | 13 | ||||||
| (d) | Blue Sky Compliance | 13 | ||||||
| (e) | Rule 144A Information | 13 | ||||||
| (f) | No Directed Selling | 13 | ||||||
| (g) | Statements to Publishers of Databases | 14 | ||||||
| (h) | Legends | 14 | ||||||
| (i) | Clearance and Settlement | 14 | ||||||
ii
TABLE OF CONTENTS
(continued)
(continued)
| Page | ||||||||
| (j) | No General Solicitation | 14 | ||||||
| (k) | No Integration | 14 | ||||||
| (l) | Rule 144 Tolling | 14 | ||||||
| (m) | Use of Proceeds | 14 | ||||||
| (n) | Transfer Agent | 14 | ||||||
| (o) | Company to Provide Interim Financial Statements | 14 | ||||||
| (p) | Agreement Not to Offer or Sell Additional Securities | 14 | ||||||
| (q) | Future Reports to the Representative | 15 | ||||||
| (r) | Investment Limitation | 15 | ||||||
| (s) | No Manipulation of Price | 15 | ||||||
| (t) | Existing Lock-Up Agreements | 15 | ||||||
| (u) | Reservation of Conversion Shares | 15 | ||||||
| (v) | Inclusion of Conversion Shares | 15 | ||||||
| (w) | FSMA | 15 | ||||||
| Section 4. | Payment of Expenses | 16 | ||||||
| Section 5. | Conditions of the Obligations of the Initial Purchasers | 16 | ||||||
| (a) | Accountants’ Comfort Letters | 16 | ||||||
| (b) | No Material Adverse Change or Rating Agency Change | 16 | ||||||
| (c) | Opinion of Counsel for the Company | 17 | ||||||
| (d) | Opinion of Foreign Counsel for the Company | 17 | ||||||
| (e) | Opinion of Counsel for the Initial Purchasers | 17 | ||||||
| (f) | Officers’ Certificate | 17 | ||||||
| (g) | Bring-down Comfort Letter | 17 | ||||||
| (h) | Registration Rights Agreement | 17 | ||||||
| (i) | Lock-Up Agreement from Officers and Directors of the Company | 18 | ||||||
| (j) | PORTAL Designation | 18 | ||||||
| (k) | Additional Documents | 18 | ||||||
| Section 6. | Representations, Warranties and Agreements of Initial Purchasers | 18 | ||||||
| Section 7. | Reimbursement of Initial Purchasers’ Expenses | 19 | ||||||
| Section 8. | Indemnification | 20 | ||||||
iii
TABLE OF CONTENTS
(continued)
(continued)
| Page | ||||||||
| (a) | Indemnification of the Initial Purchasers | 20 | ||||||
| (b) | Indemnification of the Company, its Directors and Officers | 20 | ||||||
| (c) | Notifications and Other Indemnification Procedures | 21 | ||||||
| (d) | Settlements | 21 | ||||||
| Section 9. | Contribution | 22 | ||||||
| Section 10. | Default of One or More of the Several Initial Purchasers | 23 | ||||||
| Section 11. | Termination of this Agreement | 24 | ||||||
| Section 12. | Representations and Indemnities to Survive Delivery | 24 | ||||||
| Section 13. | Notices | 24 | ||||||
| Section 14. | Successors | 25 | ||||||
| Section 15. | Partial Unenforceability | 25 | ||||||
| Section 16. | Governing Law Provisions | 25 | ||||||
| Section 17. | General Provisions | 26 | ||||||
| Section 18. | No Fiduciary Duty | 26 | ||||||
iv
August 9, 2005
CITIGROUP GLOBAL MARKETS INC.
As Representative of the several Initial Purchasers
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
As Representative of the several Initial Purchasers
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Maxtor Corporation, a Delaware corporation (the “Company”), proposes to issue and sell to the
several purchasers named in Schedule A (the “Initial Purchasers”) $300,000,000 in aggregate
principal amount of its 2.375% Convertible Senior Notes Due 2012 (the “Firm Notes”). In addition,
the Company has granted to the Initial Purchasers an over-allotment option to purchase up to an
additional $45,000,000 in aggregate principal amount of its 2.375% Convertible Senior Notes Due
2012 (the “Optional Notes” and, together with the Firm Notes, the “Notes”). Citigroup Global
Markets Inc. (“Citigroup”) has agreed to act as representative of the several Initial Purchasers
(in such capacity, the “Representative”) in connection with the offering and sale of the Notes.
The Notes will be convertible under specified circumstances into fully paid, non-assessable
shares of common stock, $.01 par value, of the Company (the “Common Stock”). The Notes will be
convertible initially at a conversion rate of 153.1089 shares per $1,000 principal amount of the
Notes, on the terms, and subject to the conditions, set forth in the Indenture (as defined below).
As used herein, “Conversion Shares” means the shares of Common Stock into which the Notes are
convertible. The Notes will be issued pursuant to an indenture (the “Indenture”) to be dated as of
the First Closing Date (as defined in Section 2), between the Company and U.S. Bank National
Association, a national banking association, as trustee (the “Trustee”).
The Notes will be offered and sold to the Initial Purchasers without being registered under
the Securities Act of 1933, as amended, and the rules and regulations (the “Rules and Regulations”)
of the Securities and Exchange Commission (the “Commission”) thereunder (the “Securities Act”), in
reliance upon an exemption therefrom.
Holders of the Notes (including the Initial Purchasers and their direct and indirect
transferees) will be entitled to the benefits of a Resale Registration Rights Agreement, dated the
First Closing Date, between the Company and the Initial Purchasers (the “Registration Rights
Agreement”), pursuant to which the Company will agree to file with the Commission a shelf
registration statement pursuant to Rule 415 under the Securities Act (the “Registration Statement”)
covering the resale of the Notes and the Conversion Shares subject to the terms and conditions
therein specified. This Agreement, the Indenture, the Notes and the Registration Rights Agreement
are referred to herein collectively as the “Operative Documents.”
The Company understands that the Initial Purchasers propose to make an offering of the Notes
on the terms and in the manner set forth herein and in the Offering
1
Memorandum (as defined below) and agrees that the Initial Purchasers may resell, subject to
the conditions set forth herein, all or a portion of the Notes to purchasers (the “Subsequent
Purchasers”) at any time after the date of this Agreement. The Notes are to be offered and sold to
or through the Initial Purchasers without being registered with the Commission under the Securities
Act in reliance upon exemptions therefrom. The terms of the Notes and the Indenture will require
that investors that acquire Notes expressly agree that Notes (and any Conversion Shares) may only
be resold or otherwise transferred, after the date hereof, if such resale or other transfer of such
Notes (or Conversion Shares) is registered for sale under the Securities Act or if an exemption
from the registration requirements of the Securities Act is available (including the exemptions
afforded by Rule 144A (“Rule 144A”) thereunder and by Regulation S thereunder (“Regulation S”).
The Company has prepared an offering memorandum setting forth information concerning the
Company, the Notes, the Registration Rights Agreement and the Common Stock. As used in this
Agreement, “Offering Memorandum” means, collectively, the preliminary offering memorandum dated as
of August 9, 2005 (the “Preliminary Offering Memorandum”) and the offering memorandum dated the
date hereof (the “Final Offering Memorandum”), each as amended or supplemented by the Company. As
used herein, each of the terms “Offering Memorandum,” “Preliminary Offering Memorandum” and “Final
Offering Memorandum” shall include in each case the documents incorporated or deemed to be
incorporated by reference therein.
The Company hereby confirms its agreements with the Initial Purchasers as follows:
Section 1. Representations and Warranties of the Company.
The Company hereby represents, warrants and covenants to each Initial Purchaser as follows:
(a) No Registration. Assuming the accuracy of the representations and warranties of the
Initial Purchasers contained in Section 6 and their compliance with the agreements set forth
therein, it is not necessary, in connection with the issuance and sale of the Notes to the Initial
Purchasers, the offer, resale and delivery of the Notes by the Initial Purchasers, and the
conversion of the Notes into Conversion Shares, in each case in the manner contemplated by this
Agreement, the Indenture and the Offering Memorandum, to register any such offer, sale, resale,
delivery and conversion of such Notes or the Conversion Shares under the Securities Act, or prior
to the effectiveness of any registration statement prepared in connection with the Company’s
obligations under the Registration Rights Agreement, to qualify the Indenture under the Trust
Indenture Act of 1939, as amended (the “Trust Indenture Act”).
(b) No Integration. None of the Company or any of its subsidiaries (other than the Initial
Purchasers in connection with the transactions contemplated by this Agreement, about which no
representation is made by the Company) has, directly or through any agent, sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any “security” (as defined in the
Securities Act) that is or will be integrated with the sale of the Notes or the Conversion Shares
in a manner that would require registration under the Securities Act of the Notes or the Conversion
Shares.
(c) Rule 144A. No securities of the same class (within the meaning of Rule 144A(d)(3) under
the Securities Act) as the Notes are listed on any national securities exchange registered
2
under Section 6 of the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (the “Exchange Act”), or quoted on an automated inter-dealer
quotation system.
(d) Offering Memorandum. The Company hereby confirms that it has authorized the use of the
Offering Memorandum in connection with the offer and sale of the Notes by the Initial Purchasers.
Each document, if any, filed or to be filed pursuant to the Exchange Act and incorporated by
reference in the Offering Memorandum complied or will comply when it is filed in all material
respects with the Exchange Act and the rules and regulations of the Commission thereunder. The
Preliminary Offering Memorandum does not contain and the Final Offering Memorandum, as of each
Closing Date (as defined in Section 2) and in the form used by the Initial Purchasers to confirm
sales, will not contain, any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that the Company makes no representation or warranty as to
information contained in or omitted from the Offering Memorandum in reliance upon and in conformity
with written information furnished to the Company by or on the behalf of the Initial Purchasers
specifically for inclusion therein. Except as disclosed in the Offering Memorandum, on the date of
this Agreement, the Company’s Annual Report on Form 10-K/A most recently filed with the Securities
and Exchange Commission and all subsequent reports which have been filed by the Company with the
Commission, sent to stockholders pursuant to the Securities Exchange Act of 1934 or incorporated by
reference in the Offering Memorandum do not include any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(e) The Purchase Agreement. This Agreement has been duly authorized, executed and delivered
by the Company and is a valid and binding agreement of the Company, enforceable against the Company
in accordance with its terms, except as rights to indemnification hereunder may be limited by
applicable law and except as the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the rights and remedies
of creditors or by general equitable principles.
(f) The Indenture. The Indenture has been duly authorized by the Company; upon effectiveness
of the Registration Statement, the Indenture will be qualified under the Trust Indenture Act; on
the First Closing Date, the Indenture will have been duly executed and delivered by the Company
and, assuming due authorization, execution and delivery of the Indenture by the Trustee, will
constitute a legally valid and binding agreement of the Company enforceable against the Company in
accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the rights and remedies
of creditors or by general equitable principles; and the Indenture will conform in all material
respects to the description thereof contained in the Offering Memorandum.
(g) The Notes. The Notes have been duly authorized by the Company; when the Notes are
executed, authenticated and issued in accordance with the terms of the Indenture and delivered to
and paid for by the Initial Purchasers pursuant to this Agreement on the respective Closing Date
(assuming due authentication of the Notes by the Trustee), such Notes will constitute legally valid
and binding obligations of the Company, entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general
3
equitable principles; and the Notes will conform in all material respects to the description
thereof contained in the Offering Memorandum.
(h) The Conversion Shares. The shares of Common Stock initially issuable upon conversion of
the Notes have been duly authorized and reserved and, when issued upon conversion of the Notes in
accordance with the terms of the Notes, will be validly issued, fully paid and non-assessable, and
the issuance of such shares will not be subject to any preemptive or similar rights.
(i) Authorization of the Registration Rights Agreement. On the First Closing Date, the
Registration Rights Agreement will have been duly authorized, executed and delivered by, and will
constitute a valid and binding agreement of, the Company, enforceable against the Company in
accordance with its terms, except as rights to indemnification thereunder may be limited by
applicable law and except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the rights and remedies
of creditors or by general equitable principles.
(j) No Material Adverse Change. Except as otherwise disclosed in the Offering Memorandum or
the documents incorporated by reference therein (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), subsequent to the respective dates as of which
information is given in the Offering Memorandum: (i) there has been no material adverse change, or
any development that would reasonably be expected to result in a material adverse change, in the
condition, financial or otherwise, or in the earnings, business or operations, whether or not
arising from transactions in the ordinary course of business, of the Company and its subsidiaries,
considered as one entity (any such change is called a “Material Adverse Change”); and (ii) except
as set forth in the Offering Memorandum, there has been no dividend or distribution of any kind
declared, paid or made by the Company or, except for dividends paid to the Company or other
subsidiaries, any of its subsidiaries on any class of capital stock or repurchase or redemption by
the Company or any of its subsidiaries of any class of capital stock.
(k) Independent Accountants. PricewaterhouseCoopers LLP (“PwC”), who have expressed their
opinion with respect to the financial statements (which term as used in this Agreement includes the
related notes thereto) included in or incorporated by reference in the Offering Memorandum, are
independent public accountants with respect to the Company within the meaning of the Securities Act
and the Exchange Act.
(l) Preparation of the Financial Statements. The financial statements included or
incorporated by reference in the Offering Memorandum present fairly the consolidated financial
position of the Company and its consolidated subsidiaries as of and at the dates indicated and the
results of their operations and cash flows for the periods specified. Such financial statements
have been prepared in conformity with generally accepted accounting principles as applied in the
United States applied on a consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto. The financial data set forth in the Offering
Memorandum under the captions “Summary—Summary Consolidated Financial Information,” “Selected
Consolidated Financial Information” and “Capitalization” fairly present the information set forth
therein on a basis consistent with that of the audited financial statements contained in the
Offering Memorandum. The Company’s ratios of earnings to fixed charges set forth in the Offering
Memorandum have been calculated in compliance with Item 503(d) of Regulation S-K under the
Securities Act. The pro forma financial data of the Company and its subsidiaries incorporated by
reference in the Offering Memorandum present fairly the information contained
4
therein, have been prepared in accordance with the Commission’s rules and guidelines with
respect to pro forma data and has been properly presented on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred to therein.
(m) Incorporation and Good Standing of the Company and its Subsidiaries. Each of the Company
and its subsidiaries has been duly incorporated and is validly existing as a corporation and (to
the extent such concept is applicable in the applicable jurisdiction) in good standing under the
laws of the jurisdiction of its incorporation and has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the Offering Memorandum and,
in the case of the Company, to enter into and perform its obligations under this Agreement. Each
of the Company and each subsidiary is duly qualified, registered or otherwise licensed to do
business as a foreign corporation and is in good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of property or the conduct
of business, except for such jurisdictions where the failure to so qualify or to be in good
standing would not, individually or in the aggregate, result in a Material Adverse Change. All of
the issued and outstanding capital stock of each subsidiary has been duly authorized and validly
issued, is fully paid and (to the extent such concept is applicable in the applicable jurisdiction)
nonassessable and is owned by the Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or claim. The Company does not own or
control, directly or indirectly, any corporation, association or other entity other than (i) the
subsidiaries listed in Exhibit 21.1 to the Company’s Annual Report on Form 10-K/A for the fiscal
year ended December 25, 2004 and (ii) certain other subsidiaries which are not individually or in
the aggregate, “significant” subsidiaries as defined in Rule 1-02(w) of Regulation S-X promulgated
by the Securities and Exchange Commission.
(n) Capitalization and Other Capital Stock Matters. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Offering Memorandum under the caption
“Capitalization” (other than for subsequent issuances, if any, pursuant to employee benefit plans
described in the Offering Memorandum or upon exercise of outstanding options described in the
Offering Memorandum). The Common Stock (including the Conversion Shares) conforms in all material
respects to the description thereof contained in the Offering Memorandum. All of the issued and
outstanding shares of Common Stock have been duly authorized and validly issued, are fully paid and
nonassessable and have been issued in compliance with federal and state securities laws, except for
11,100,000 shares which were offered and sold under the Company’s 1998 Employee Stock Purchase Plan
for which no registration statement was filed pursuant to the Securities Act prior to such offer
and sale. None of the outstanding shares of Common Stock were issued in violation of any
preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase
securities of the Company. The description of the Company’s stock option, stock bonus and other
stock plans or arrangements, and the options or other rights granted thereunder, set forth in
documents incorporated by reference in the Offering Memorandum accurately and fairly presents and
summarizes such plans, arrangements, options and rights.
(o) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals
Required. Neither the Company nor any of its subsidiaries is in violation of its respective
charter or by-laws (or similar organizations documents) or is in default (or, with the giving of
notice or lapse of time, would be in default) (“Default”) under any indenture, mortgage, loan or
credit agreement, note, contract, franchise, lease or other instrument to which the Company or any
of its subsidiaries is a party or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any of its subsidiaries is subject (each, an “Existing
5
Instrument”), except for such Defaults as would not, individually or in the aggregate, result
in a Material Adverse Change.
The Company’s execution, delivery and performance of the Operative Documents and consummation
of the transactions contemplated thereby and by the Offering Memorandum will not (i) result in any
violation of the provisions of the charter or by-laws of the Company or any subsidiary, (ii)
materially conflict with or constitute a material breach of, or material Default under, or result
in the creation or imposition of any material lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, or require the consent of any other
party to, any Existing Instrument or (iii) result in any violation of any law, administrative
regulation or administrative or court decree applicable to the Company or any subsidiary. No
consent, approval, authorization or other order of, or registration or filing with, any court or
other governmental or regulatory authority or agency, is required for the Company’s execution,
delivery and performance of the Operative Documents and consummation of the transactions
contemplated thereby and by the Offering Memorandum, except (i) as may be required under the
Securities Act, the Trust Indenture Act and the Rules and Regulations promulgated thereunder with
respect to the transactions contemplated by the Registration Rights Agreement and (ii) such as have
been obtained or made by the Company and are in full force and effect under the Securities Act,
applicable state securities or blue sky laws and from the NASD.
(p) No Material Actions or Proceedings. Except as otherwise disclosed or incorporated by
reference in the Offering Memorandum (exclusive of any amendments or supplements thereto subsequent
to the date of this Agreement), there are no legal or governmental actions, suits or proceedings
pending or, to the Company’s knowledge, threatened (i) against or affecting the Company or any of
its subsidiaries, (ii) which has as the subject thereof any officer or director (in such capacity)
of, or property owned or leased by, the Company or any of its subsidiaries or (iii) relating to
environmental or discrimination matters, where in any such case (A) there is a reasonable
possibility that such action, suit or proceeding might be determined adversely to the Company or
such subsidiary and (B) any such action, suit or proceeding, if so determined adversely, would
reasonably be expected to result in a Material Adverse Change or adversely affect the consummation
of the transactions contemplated by this Agreement.
(q) No Labor Disputes. No material labor dispute with the employees of the Company or any of
its subsidiaries exists or, to the Company’s knowledge, is threatened.
(r) Intellectual Property Rights. The Company and its subsidiaries own or possess sufficient
trademarks, trade names, patent rights, copyrights, domain names, licenses, approvals, trade
secrets and other similar rights (collectively, “Intellectual Property Rights”) reasonably
necessary to conduct their businesses as now conducted; and the expected expiration of any of such
Intellectual Property Rights would not result in a Material Adverse Change. Except as otherwise
disclosed or incorporated by reference in the Offering Memorandum (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement), neither the Company nor any of its
subsidiaries has received any notice of infringement or conflict with asserted Intellectual
Property Rights of others, which infringement or conflict, if the subject of an unfavorable
decision, would result in a Material Adverse Change. None of the technology employed by the
Company has been obtained or is being used by the Company in violation of any contractual
obligation binding on the Company or, to the Company’s knowledge, any of its officers, directors or
employees or otherwise in violation of the rights of any persons.
(s) All Necessary Permits, etc. The Company and each subsidiary possess such valid and
current certificates, authorizations or permits issued by the appropriate state, federal or
6
foreign regulatory agencies or bodies necessary to conduct their respective businesses in each
case, with such exceptions as would not, individually or in the aggregate, result in a Material
Adverse Change. Neither the Company nor any subsidiary has received any notice of proceedings
relating to the revocation or modification of, or non-compliance with, any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, could result in a Material Adverse Change.
(t) Title to Properties. Except as described in the Offering Memorandum, the Company and
each of its subsidiaries has good and marketable title to all the properties and assets reflected
as owned in the financial statements included or incorporated by reference in the Offering
Memorandum, in each case free and clear of any security interests, mortgages, liens, encumbrances,
equities, claims and other defects, except such as do not, singly or in the aggregate, materially
and adversely affect the value of such property and do not, singly or in the aggregate, materially
interfere with the use made or proposed to be made of such property by the Company or such
subsidiary. The real property, improvements, equipment and personal property held under lease by
the Company or any subsidiary are held under valid and enforceable leases, with such exceptions as
are not material and do not, singly or in the aggregate, materially interfere with the use made or
proposed to be made of such real property, improvements, equipment or personal property by the
Company or such subsidiary.
(u) Tax Law Compliance. The Company and its consolidated subsidiaries have filed all
necessary federal, state and foreign income and franchise tax returns or have properly requested
extensions thereof and have paid all taxes required to be paid by any of them and, if due and
payable, any related or similar assessment, fine or penalty levied against any of them except as
may be being contested in good faith and by appropriate proceedings. The Company has made adequate
charges, accruals and reserves in the financial statements included or incorporated by reference in
the Offering Memorandum in respect of all federal, state and foreign income and franchise taxes for
all periods as to which the tax liability of the Company or any of its consolidated subsidiaries
has not been finally determined.
(v) Company Not Required to Register As an Investment Company. The Company has been advised
of the rules and requirements under the Investment Company Act of 1940, as amended (the “Investment
Company Act”). The Company is not, and, after receipt of payment for the Notes and application of
the proceeds as described in the Offering Memorandum, will not be, required to register as an
“investment company” within the meaning of the Investment Company Act and will conduct its business
in a manner so that it will not become subject to the Investment Company Act.
(w) Insurance. Each of the Company and its subsidiaries maintains insurance policies in such
amounts and with such deductibles and covering such risks as are generally deemed adequate and
customary for their businesses. The Company has no reason to believe that it or any subsidiary
will not be able (i) to renew its existing insurance coverage as and when such policies expire or
(ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to
conduct its business as now conducted and at a cost that would not result in a Material Adverse
Change.
(x) No Price Stabilization or Manipulation. The Company has not taken and will not take,
directly or indirectly, any action designed to or that might be reasonably expected to cause or
result in stabilization or manipulation of the price of the Notes or the Conversion Shares to
facilitate the sale or resale of the Notes. The Company acknowledges that the Initial Purchasers
may engage in stabilization transactions as described in the Offering Memorandum.
7
(y) Related Party Transactions. There are no business relationships or related-party
transactions involving the Company or any subsidiary or any other person required to be described
in the documents incorporated or deemed incorporated in the Offering Memorandum which have not been
described as required.
(z) Recent Sales. Except as disclosed in the Offering Memorandum, the Company has not sold
or issued any shares of Common Stock, any security convertible into shares of Common Stock or any
security of the same class as the Notes during the six-month period preceding the date of the
Offering Memorandum, including any sales pursuant to Rule 144A or under Regulation D or S of the
Securities Act, other than options or shares issued pursuant to the Company’s stock plans or
pursuant to outstanding options, rights or warrants.
(aa) No General Solicitation. None of the Company or any of its affiliates (as defined in
Rule 501(b) of Regulation D under the Securities Act (“Regulation D”)), has, directly or through an
agent, engaged in any form of general solicitation or general advertising in connection with the
offering of the Notes or the Conversion Shares (as those terms are used in Regulation D) under the
Securities Act or in any manner involving a public offering within the meaning of Section 4(2) of
the Securities Act; the Company has not entered into any contractual arrangement with respect to
the distribution of the Notes or the Conversion Shares except for its contractual arrangements with
the Initial Purchasers, and the Company will not enter into any such arrangement except for the
Registration Rights Agreement and as may be contemplated thereby.
(bb) No Directed Selling Efforts. None of the Company, its affiliates, or any person acting
on its or their behalf has engaged in any directed selling efforts (within the meaning of
Regulation S) with respect to the Notes or the Conversion Shares; and each of the Company, its
affiliates and each person acting on its or their behalf has complied with the offering
restrictions requirement of Regulation S.
(cc) Company’s Accounting System. The Company maintains a system of accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed in accordance with
management’s general or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally accepted accounting
principles as applied in the United States and to maintain accountability for assets; (iii) access
to assets is permitted only in accordance with management’s general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(dd) Compliance with Environmental Laws. Except as would not, individually or in the
aggregate, result in a Material Adverse Change (i) neither the Company nor any of its subsidiaries
is in violation of any federal, state, local or foreign law or regulation relating to pollution or
protection of human health or the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife, including without limitation,
laws and regulations relating to emissions, discharges, releases or threatened releases of
chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum and
petroleum products (collectively, “Materials of Environmental Concern”), or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling
of Materials of Environment Concern (collectively, “Environmental Laws”), which violation includes,
but is not limited to, noncompliance with any permits or other governmental authorizations required
for the operation of the business of the Company or its subsidiaries under applicable Environmental
Laws, or noncompliance with the terms and conditions thereof, nor has the Company or any of its
subsidiaries received any written communication, whether from a
8
governmental authority, citizens group, employee or otherwise, that alleges that the Company
or any of its subsidiaries is in violation of any Environmental Law; (ii) there is no claim, action
or cause of action filed with a court or governmental authority, no investigation with respect to
which the Company has received written notice, and no written notice by any person or entity
alleging potential liability for investigatory costs, cleanup costs, governmental responses costs,
natural resources damages, property damages, personal injuries, attorneys’ fees or penalties
arising out of, based on or resulting from the presence, or release into the environment, of any
Material of Environmental Concern at any location owned, leased or operated by the Company or any
of its subsidiaries, now or in the past (collectively, “Environmental Claims”), pending or, to the
Company’s knowledge, threatened against the Company or any of its subsidiaries or any person or
entity whose liability for any Environmental Claim the Company or any of its subsidiaries has
retained or assumed either contractually or by operation of law; and (iii) to the Company’s
knowledge, there are no past or present actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release, emission, discharge, presence or disposal of
any Material of Environmental Concern, that reasonably could result in a violation of any
Environmental Law or form the basis of a potential Environmental Claim against the Company or any
of its subsidiaries or against any person or entity whose liability for any Environmental Claim the
Company or any of its subsidiaries has retained or assumed either contractually or by operation of
law.
In the ordinary course of its business, the Company periodically reviews the effect of
Environmental Laws on the business, operations and properties of the Company and its subsidiaries,
in the course of which it identifies and evaluates associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws, or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third parties); on the basis
of such review, the Company has reasonably concluded that such associated costs and liabilities
would not, singly or in the aggregate, cause a Material Adverse Change.
(ee) Compliance with Laws. The Company has not been advised, and has no reason to believe,
that it and each of its subsidiaries are not conducting business in compliance with all applicable
laws, rules and regulations of the jurisdictions in which it is conducting business, except where
failure to be so in compliance would not result in a Material Adverse Change.
(ff) Securities Exchange Act of 1934. The Company is subject to, and in compliance with, in
all material respects, the reporting requirements of either Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 and files reports with the Commission on the Electronic Data
Gathering, Analysis, and Retrieval (▇▇▇▇▇) system.
(gg) Compliance with ERISA. Each employee benefit plan, within the meaning of Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that is maintained,
administered or contributed to by the Company or any of its affiliates for employees or former
employees of the Company and its affiliates has been maintained in compliance with its terms and
the requirements of any applicable statutes, orders, rules and regulations, including but not
limited to ERISA and the Internal Revenue Code of 1986, as amended (the “Code”); no prohibited
transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred
with respect to any such plan excluding transactions effected pursuant to a statutory or
administrative exemption; and, for each such plan that is subject to the funding rules of Section
412 of the Code or Section 302 of ERISA, no “accumulated funding deficiency” as defined in Section
412 of the Code has been incurred, whether or not waived, and the fair market value of the assets
of each such plan (excluding for
9
these purposes accrued but unpaid contributions) exceeds the present value of all benefits
accrued under such plan determined using reasonable actuarial assumptions.
(hh) UK Stabilising Rules. To the extent that information is required to be publicly
disclosed under the UK Financial Services Authority’s Price Stabilising Rules (the “Stabilising
Rules”) before stabilizing transactions can be undertaken in compliance with the safe harbor
provided under such Stabilising Rules, such information has been adequately publicly disclosed
(within the meaning of the Stabilising Rules).
(ii) No Unlawful Payments. Neither the Company nor, to the knowledge of the Company, any
director, officer, agent, employee or other person associated with or acting on behalf of the
Company has (i) used any corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv)
made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.
(jj) No Prohibition of Dividends. Except for generally applicable restrictions arising under
applicable corporate law, no subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other distribution on such
subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary
from the Company or from transferring any of such subsidiary’s property or assets to the Company or
any other subsidiary of the Company.
(kk) Compliance with Money Laundering Laws. The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued, administered or
enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit
or proceeding by or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is
pending or, to the best knowledge of the Company, threatened.
(ll) Regulated Foreign Assets. None of the Company, any of its subsidiaries or, to the
knowledge of the Company, any director, officer, agent, employee or Affiliate of the Company or any
of its subsidiaries is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”); and the Company will not
directly or indirectly use the proceeds of the offering of the Notes hereunder, or lend, contribute
or otherwise make available such proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any person currently subject to any U.S.
sanctions administered by OFAC.
(mm) Statistical and Market-Related Data. Any statistical and market-related data included
in the Offering Memorandum are based on or derived from sources that the Company believes to be
reliable and accurate, and the Company has obtained the written consent to the use of such data
from such sources.
(nn) ▇▇▇▇▇▇▇▇-▇▇▇▇▇. There is and has been no failure on the part of the Company and any of
the Company’s directors or officers, in their capacities as such, to comply in any material
10
respect with any provision of the Sarbanes Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith (the “Sarbanes Oxley Act”), including Section 402 related to
loans and Sections 302 and 906 related to certifications.
Any certificate signed by an officer of the Company and delivered to the Representative or to
counsel for the Initial Purchasers shall be deemed to be a representation and warranty by the
Company to each Initial Purchaser as to the matters set forth therein.
The Company acknowledges that the Initial Purchasers and, for purposes of the opinions to be
delivered pursuant to Section 5 hereof, counsel to the Company and counsel to the Initial
Purchasers, will rely upon the accuracy and truthfulness of the foregoing representations and
hereby consents to such reliance.
Section 2. Purchase, Sale and Delivery of the Notes.
(a) The Firm Notes. On the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set forth, the Initial
Purchasers agree, severally and not jointly, to purchase from the Company the respective principal
amount of Firm Notes set forth opposite their names under the heading “Aggregate Principal Amount
of Firm Notes to be Purchased” on Schedule A at a purchase price of 97.75% of the aggregate
principal amount thereof.
(b) The First Closing Date. Delivery of the Firm Notes to be purchased by the Initial
Purchasers and payment therefor shall be made at the offices of Citigroup, 10▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (or such other place as may be agreed to by the Company
and the Representative) at 7:00 a.m. Palo Alto time, on August 15, 2005, or such other time and
date as may be agreed to by the Company and the Representative (the time and date of such closing
are called the “First Closing Date”). The Company hereby acknowledges that circumstances under
which the Representative may provide notice to postpone the First Closing Date as originally
scheduled include, but are in no way limited to, any determination by the Company or the
Representative to recirculate copies of an amended or supplemented Offering Memorandum or a delay
as contemplated by the provisions of Section 10.
(c) The Optional Notes; the Second Closing Date. In addition, on the basis of the
representations, warranties and agreements herein contained, and upon the terms but subject to the
conditions herein set forth, the Company hereby grants an over-allotment option to the several
Initial Purchasers to purchase, severally and not jointly, up to $45,000,000 aggregate principal
amount of Optional Notes from the Company in the respective principal amounts set forth opposite
their name under the heading “Aggregate Principal Amount of Optional Notes Allocated” on Schedule A
and at a purchase price of 97.75% of the aggregate principal amount thereof. The over-allotment
option granted hereunder may be exercised at any time (but not more than once) upon notice by the
Representative to the Company, which notice may be given at any time within 30 days from the date
of this Agreement. Such notice shall set forth (i) the amount (which shall be an integral multiple
of $1,000 in aggregate principal amount) of Optional Notes as to which the Initial Purchasers are
exercising the over-allotment option, (ii) the names and denominations in which
the Optional Notes are to be registered and (iii) the time, date and place at which such Notes
will be delivered (which time and date may be simultaneous with, but not earlier than, the First
Closing Date; and in such case the term “First Closing Date” shall refer to the time and date of
delivery of the Firm Notes and the Optional Notes). Such time and date of delivery, if subsequent
to the First Closing
Date, is called the “Second Closing Date” and shall be reasonably determined
by the Representative. Such date may be the same as the First Closing
11
Date but not earlier than
the First Closing Date nor later than 10 business days after the date of such notice. If any
Optional Notes are to be purchased, each Initial Purchaser agrees, severally and not jointly, to
purchase the principal amount of Optional Notes (subject to such adjustments to eliminate
fractional amount as the Representative may determine) that bears the same proportion to the total
principal amount of Optional Notes to be purchased as the principal amount of Firm Notes set forth
on Schedule A opposite the name of such Initial Purchaser bears to the total principal amount of
Firm Notes. The Representative may cancel the over-allotment option at any time prior to its
expiration by giving written notice of such cancellation to the Company.
(d) Payment for the Notes. Payment for the Notes shall be made at the First Closing Date
(and, if applicable, at the Second Closing Date) by wire transfer of immediately available funds to
the order of the Company.
It is understood that the Representative has been authorized, for its own account and the
accounts of the several Initial Purchasers, to accept delivery of and receipt for, and make payment
of the purchase price for, the Firm Notes and any Optional Notes the Initial Purchasers have agreed
to purchase. The Representative may (but shall not be obligated to) make payment for any Notes to
be purchased by any Initial Purchaser whose funds shall not have been received by the
Representative by the First Closing Date or the Second Closing Date, as the case may be, for the
account of such Initial Purchaser, but any such payment shall not relieve such Initial Purchaser
from any of its obligations under this Agreement.
(e) Delivery of the Notes. The Company shall deliver, or cause to be delivered, to the
Representative for the accounts of the several Initial Purchasers the Firm Notes at the First
Closing Date, against the irrevocable release of a wire transfer of immediately available funds for
the amount of the purchase price therefor. The Company shall also deliver, or cause to be
delivered, to the Representative for the accounts of the several Initial Purchasers, the Optional
Notes the Initial Purchasers have agreed to purchase at the First Closing Date or the Second
Closing Date, as the case may be, against the irrevocable release of a wire transfer of immediately
available funds for the amount of the purchase price therefor. The Notes shall be registered in
such names and denominations as the Representative shall have requested at least two full business
days prior to the First Closing Date (or the Second Closing Date, as the case may be) and shall be
made available for inspection on the business day preceding the First Closing Date (or the Second
Closing Date, as the case may be) at a location in New York City as the Representative may
designate. Time shall be of the essence, and delivery at the time and place specified in this
Agreement is a further condition to the obligations of the Initial Purchasers.
Section 3. Additional Covenants of the Company.
The Company further covenants and agrees with each Initial Purchaser as follows:
(a) Representative’s Review of Proposed Amendments and Supplements. The Company will not
amend or supplement the Offering Memorandum, other than by filing documents under the Exchange Act
that are incorporated by reference therein, without the prior written consent of the
Representative, which consent shall not be unreasonably withheld or delayed; provided,
however, that, prior to the completion of the distribution of the Notes by the Initial
Purchasers (as determined by the Initial Purchasers), the Company will not file any document under
the Exchange Act that is incorporated by reference in the Offering Memorandum unless, prior to such
proposed filing, the Company has furnished the Representative with a copy of such document for
12
their review and the Representative has not reasonably objected to the filing of such document.
The Company will promptly advise the Representative when any document filed under the Exchange Act
that is incorporated by reference in the Offering Memorandum shall have been filed with the
Commission.
(b) Amendments and Supplements to the Offering Memorandum and Other Securities Act Matters.
If, at any time prior to the completion of the resale of the Notes by the Initial Purchasers (as
notified by the Initial Purchasers to the Company), any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Offering Memorandum in order that the
Offering Memorandum will not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the circumstances
existing at the time it is delivered to a purchaser, not misleading, or if in the opinion of the
Representative or counsel for the Initial Purchasers it is otherwise necessary to amend or
supplement the Offering Memorandum to comply with law, the Company shall promptly notify the
Initial Purchasers and prepare, subject to Section 3(a) hereof, such amendment or supplement as may
be necessary to correct such untrue statement or omission.
(c) Copies of Offering Memorandum. The Company agrees to furnish the Representative, without
charge, as many copies of the Offering Memorandum and any amendments and supplements thereto as the
Representative may reasonably request.
(d) Blue Sky Compliance. The Company shall cooperate with the Representative and counsel for
the Initial Purchasers, as the Initial Purchasers may reasonably request from time to time, to
qualify or register the Notes for sale under (or obtain exemptions from the application of) the
state securities or blue sky laws of those jurisdictions designated by the Representative, shall
comply with such laws and shall continue such qualifications, registrations and exemptions in
effect so long as required for the distribution of the Notes. The Company shall not be required to
qualify as a foreign corporation or to take any action that would subject it to general service of
process in any such jurisdiction where it is not presently qualified or where it would be subject
to taxation as a foreign corporation. The Company will advise the Representative promptly of the
suspension of the qualification or registration of (or any such exemption relating to) the Notes
for
offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding
for any such purpose, and in the event of the issuance of any order suspending such qualification,
registration or exemption, the Company shall use its reasonable efforts to obtain the withdrawal
thereof at the earliest possible time.
(e) Rule 144A Information. For so long as any of the Notes are “restricted securities”
within the meaning of Rule 144(a)(3) under the Securities Act, the Company shall provide to any
holder of the Notes or to any prospective purchaser of the Notes designated by any holder, upon
request of such holder or prospective purchaser, information required to be provided by Rule
144A(d)(4) of the Securities Act if, at the time of such request, the Company is not subject to the
reporting requirements under Section 13 or 15(d) of the Exchange Act. Any information provided by
the Company to publishers of publicly available databases about the terms of the Notes shall
include a statement that the Notes have not been registered under the Act and are subject to
restrictions under Rule 144A under the Act.
(f) No Directed Selling. None of the Company, its affiliates, or any person acting on its or
their behalf will engage in any directed selling efforts with respect to the Notes, and each of
them will comply with the offering restrictions requirement of Regulation S. Terms used in this
paragraph have the meanings given to them by Regulation S.
13
(g) Statements to Publishers of Databases. Any information provided by the Company to
publishers of publicly available databases about the terms of the Notes shall include a statement
that the Notes have not been registered under the Act and are subject to restrictions under Rule
144A under the Act and Regulation S.
(h) Legends. Each of the Notes and Conversion Shares will bear, to the extent applicable, the
legend contained in “Transfer Restrictions” in the Offering Memorandum for the time period and upon
the other terms stated therein.
(i) Clearance and Settlement. The Company will cooperate with the Representative and use its
reasonable best efforts to permit the Notes to be eligible for clearance and settlement through The
Depository Trust Company.
(j) No General Solicitation. Except following the effectiveness of the Registration
Statement (as defined in the Registration Rights Agreement), the Company will not, and will cause
its subsidiaries not to, solicit any offer to buy or offer to sell the Notes or the Common Stock by
means of any form of general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act.
(k) No Integration. The Company will not, and will cause its subsidiaries not to, sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any “security” (as defined in the Securities
Act) in a transaction that could be integrated with the sale of the Notes in a manner that would
require the registration under the Securities Act of the Notes.
(l) Rule 144 Tolling. During the period of two years after the last Closing Date, the
Company will not resell, and will not permit any of its “affiliates” (as defined in Rule 144 under
the Securities Act) to resell any of the Notes which constitute “restricted securities” under Rule
144 that have been reacquired by any of them.
(m) Use of Proceeds. The Company shall apply the net proceeds from the sale of the Notes
sold by it in the manner described under the caption “Use of Proceeds” in the Offering Memorandum.
(n) Transfer Agent. The Company shall engage and maintain, at its expense, a registrar and
transfer agent for the Common Stock.
(o) Company to Provide Interim Financial Statements. Prior to the Closing Date, the Company
will furnish the Initial Purchasers, as soon as they have been prepared by or are available to the
Company, a copy of any unaudited interim financial statements of the Company for any period
subsequent to the period covered by the most recent financial statements appearing in the Offering
Memorandum.
(p) Agreement Not to Offer or Sell Additional Securities. During the period commencing on the
date hereof and ending on the 90th day following the date of the Final Offering
Memorandum, the Company will not, without the prior written consent of Citigroup (which consent may
be withheld at the sole discretion of Citigroup), directly or indirectly, sell, offer, contract or
grant any option to sell, pledge, transfer or establish an open “put equivalent position” within
the meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or transfer, or
announce the offering of, or file any registration statement under the Securities Act in respect
of, any shares of Common Stock, options or warrants to acquire shares of the Common
14
Stock or
securities exchangeable or exercisable for or convertible into shares of Common Stock (other than
as contemplated by this Agreement and the Registration Rights Agreement with respect to the Notes);
provided, however, that the Company may issue shares of its Common Stock or options to purchase its
Common Stock, or Common Stock upon exercise of options, pursuant to any stock option, stock bonus
or other stock plan or arrangement described in the Final Offering Memorandum or documents
incorporated by reference in the Final Offering Memorandum.
(q) Future Reports to the Representative. During the period of five years after the First
Closing Date the Company will furnish to the Representative at its request, (i) as soon as
practicable after the end
of each fiscal year, copies of the annual report of the Company containing the balance sheet
of the Company as of the close of such fiscal year and statements of income, stockholders’ equity
and cash flows for the year then ended and the opinion thereon of the Company’s independent public
accountants; (ii) as soon as practicable after the filing thereof, copies of each proxy statement,
Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other
report filed by the Company with the Commission, the NASD or any securities exchange; and (iii) as
soon as available, copies of any report or communication of the Company mailed generally to holders
of its capital stock.
(r) Investment Limitation. The Company shall not invest or otherwise use the proceeds
received by the Company from its sale of the Notes in such a manner as would require the Company or
any of its subsidiaries to register as an investment company under the Investment Company Act.
(s) No Manipulation of Price. The Company will not take, directly or indirectly, any action
designed to cause or result in, or that constitutes or might reasonably be expected to constitute,
the stabilization or manipulation of the price of any securities of the Company to facilitate the
sale or resale of the Notes or the Conversion Shares.
(t) Existing Lock-Up Agreements. The Company will enforce all existing agreements between
the Company and any of its security holders that prohibit the sale, transfer, assignment, pledge or
hypothecation of any of the Company’s securities in connection with the Company’s initial public
offering. In addition, the Company will direct the transfer agent to place stop transfer
restrictions upon any such securities of the Company that are bound by such existing “lock-up”
agreements for the duration of the periods contemplated in such agreements.
(u) Reservation of Conversion Shares. The Company will reserve and keep available at all
times, free of pre-emptive rights, the full number of Shares of Common Stock issuable upon
conversion of the Notes.
(v) Inclusion of Conversion Shares. The Company will use its best efforts to have the
Conversion Shares approved by the New York Stock Exchange for listing prior to the effectiveness of
the Registration Statement.
(w) FSMA. The Company will not take any action or omit to take any action (such as issuing
any press release relating to any Notes without an appropriate legend) which may result in the loss
by any of the Initial Purchasers of the ability to rely on any stabilization safe harbor provided
by the Financial Services Authority under the Financial Services and Markets Act 2000 (“FSMA”).
15
Section 4. Payment of Expenses.
The Company agrees to pay all costs, fees and expenses incurred in connection with the
performance of its obligations hereunder and in connection with the
transactions contemplated hereby, including without limitation (i) all expenses incident to
the issuance and delivery of the Notes (including all printing and engraving costs), (ii) all fees
and expenses of the Trustee under the Indenture, (iii) all necessary issue, transfer and other
stamp taxes in connection with the issuance and sale of the Notes to the Initial Purchasers, (iv)
all fees and expenses of the Company’s counsel, independent public accountants and other advisors,
(v) all costs and expenses incurred in connection with the preparation, printing, shipping and
distribution of the Offering Memorandum, all amendments and supplements thereto and this Agreement,
(vi) all filing fees, attorneys’ fees and expenses incurred by the Company or the Initial
Purchasers in connection with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Notes for offer and sale under the state
securities or blue sky laws, and, if requested by the Representative, preparing and printing a
“Blue Sky Survey” or memorandum, and any supplements thereto, advising the Initial Purchasers of
such qualifications, registrations and exemptions, (vii) the expenses of the Company and the
Initial Purchasers in connection with the marketing and offering of the Notes, (viii) the fees and
expenses associated with listing the Conversion Shares on the New York Stock Exchange, (ix) all
expenses and fees in connection with admitting the Notes for trading in the PORTAL Market and (x)
any fees charged by investment rating agencies for the rating of the Notes. Except as provided in
this Section 4, Section 7 and Section 11 hereof, the Initial Purchasers shall pay their own
expenses, including the fees and disbursements of their counsel.
Section 5. Conditions of the Obligations of the Initial Purchasers.
The obligations of the several Initial Purchasers to purchase and pay for the Notes as
provided herein on the First Closing Date and, with respect to the Optional Notes, the Second
Closing Date, shall be subject to the accuracy of the representations and warranties on the part of
the Company set forth in Section 1 hereof as of the date hereof and as of the First Closing Date as
though then made and, with respect to the Optional Notes, as of the Second Closing Date as though
then made, to the timely performance by the Company of its covenants and other obligations
hereunder, and to each of the following additional conditions:
(a) Accountants’ Comfort Letters. On the date hereof, the Representative shall have received
from PwC, independent public accountants for the Company, a letter dated the date hereof addressed
to the Initial Purchasers, in form and substance satisfactory to the Representative, containing
statements and information of the type ordinarily included in accountants’ “comfort letters” to
Initial Purchasers, delivered according to Statement of Auditing Standards No. 72 (or any successor
bulletin) (“SAS 72”), with respect to the audited and unaudited financial statements and certain
financial information contained in the Offering Memorandum.
(b) No Material Adverse Change or Rating Agency Change. For the period from and after the
date of this Agreement and prior to the First Closing Date and, with respect to the Optional Notes,
the Second Closing Date:
(i) in the reasonable judgment of the Representative there shall not have occurred any
Material Adverse Change; and
(ii) there shall not have occurred any downgrading, nor shall any notice have been
given of any intended or potential downgrading or of any review for a possible change that
does not indicate the direction of the possible change, in the rating accorded
16
any securities of the Company or any of its subsidiaries by any “nationally recognized
statistical rating organization” as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act.
(c) Opinion of Counsel for the Company. On each of the First Closing Date and the Second
Closing Date the Representative shall have received an opinion of DLA ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ US,
LLP, counsel for the Company, or such other counsel as shall be reasonably acceptable to the
Representative in its discretion, dated as of such Closing Date, in substantially the form attached
as Exhibit A-1.
(d) Opinion of Foreign Counsel for the Company. On each of the First Closing Date and the
Second Closing Date the Representative shall have received an opinion of foreign counsel for the
Company reasonably acceptable to the Representative, dated as of such Closing Date, covering the
matters set forth in Exhibit A-2, with respect to each non-U.S. significant subsidiary (as such
term is defined in Rule 405 under the Securities Act) of the Company (each a “Foreign Significant
Subsidiary”), in form and substance satisfactory to the Representative.
(e) Opinion of Counsel for the Initial Purchasers. On each of the First Closing Date and the
Second Closing Date the Representative shall have received an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, counsel for the Initial Purchasers, dated as of such Closing Date, in form and
substance satisfactory to the Representative.
(f) Officers’ Certificate. On each of the First Closing Date and the Second Closing Date the
Representative shall have received a written certificate executed by the Chairman of the Board,
Chief Executive Officer or President of the Company and the Chief Financial Officer (or person
acting in such capacity, provided a different natural person executed such written certificate as
Chairman of the Board, Chief Executive Officer or President of the Company) or Chief Accounting
Officer of the Company, dated as of such Closing Date, to the effect set forth in subsection
(b)(ii) of this Section 5, and further to the effect that:
(i) for the period from and after the date of this Agreement and prior to such Closing
Date, there has not occurred any Material Adverse Change;
(ii) the representations, warranties and covenants of the Company set forth in Section
1 of this Agreement are true and correct in all material respects with the same force and
effect as though expressly made on and as of such Closing Date; and
(iii) the Company has, in all material respects, complied with all the agreements
hereunder and satisfied all the conditions on its part to be performed or satisfied
hereunder at or prior to such Closing Date.
(g) Bring-down Comfort Letter. On each of the First Closing Date and the Second Closing Date the Representative shall have
received from PwC, a letter dated such date, in form and substance satisfactory to the
Representative, to the effect that they reaffirm the statements made in the letter furnished by
them pursuant to subsection (a) of this Section 5, except that the specified date referred to
therein for the carrying out of procedures shall be no more than three business days prior to the
First Closing Date or Second Closing Date, as the case may be.
(h) Registration Rights Agreement. The Company and the Initial Purchasers shall have executed
and delivered the Registration Rights Agreement (in form and substance satisfactory to the Initial
Purchasers), and the Registration Rights Agreement shall be in full force and effect.
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(i) Lock-Up Agreement from Officers and Directors of the Company. On or prior to the date
hereof, the Company shall have furnished to the Representative an agreement in the form of Exhibit
B hereto from each executive officer and director of the Company, and each such agreement shall be
in full force and effect on each of the First Closing Date and the Second Closing Date.
(j) PORTAL Designation. The Notes shall have been designated PORTAL-eligible securities in
accordance with the rules and regulations of the National Association of Securities Dealers, Inc.
(k) Additional Documents. On or before each of the First Closing Date and the Second Closing
Date, the Representative and counsel for the Initial Purchasers shall have received such
information, documents and opinions as they may reasonably require for the purposes of enabling
them to pass upon the issuance and sale of the Notes as contemplated herein, or in order to
evidence the accuracy of any of the representations and warranties, or the satisfaction of any of
the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied in all material respects when
and as required to be satisfied, this Agreement may be terminated by the Representative by notice
to the Company at any time on or prior to the First Closing Date and, with respect to the Optional
Notes, at any time prior to the Second Closing Date, which termination shall be without liability
on the part of any party to any other party, except that Section 4, Section 7, Section 8 and
Section 9 shall at all times be effective and shall survive such termination.
Section 6. Representations, Warranties and Agreements of Initial Purchasers.
Each of the Initial Purchasers represents and warrants that it is a “qualified institutional
buyer,” as defined in Rule 144A of the Securities Act. Each Initial Purchaser agrees with the
Company that:
(a) The Notes and the Conversion Shares have not been and will not be registered under the
Securities Act in connection with the initial offering of the Notes.
(b) The Initial Purchasers are purchasing the Notes pursuant to a private sale exemption from
registration under the Securities Act.
(c) The Initial Purchasers have not offered or sold, and will not offer or sell, any Notes
within the United States or to, or for the account or benefit of, U.S. persons (x) as part of their
distribution at any time or (y) otherwise until one year after the later of the commencement of the
offering and the date of closing of the offering except (1) to those it reasonably believes to be
“qualified institutional buyers” (as defined in Rule 144A under the Act) or (2) in accordance with
Rule 903 of Regulation S.
(d) The Initial Purchasers will not engage in hedging transactions with regard to the Notes
prior to the expiration of the distribution compliance period as (defined in Regulation S), unless
in compliance with the Act.
(e) Neither the Initial Purchasers, nor any of their affiliates nor any person acting on
their behalf has engaged or will engage in any directed selling efforts (within the meaning of
Regulation S) with respect to the Notes.
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(f) The Initial Purchasers have not entered and will not enter into any contractual
arrangement with any distributor (within the meaning of Regulation S) with respect to the
distribution of the Notes, except with their affiliates or with the prior written consent of the
Company.
(g) The Initial Purchasers have complied and will comply with the offering restrictions
requirement of Regulation S.
(h) At or prior to the confirmation of sale of Notes (other than a sale of Notes to
“qualified institutional buyers” (as defined in Rule 144A)), the Initial Purchasers shall have sent
to each distributor, dealer or person receiving a selling concession, fee or other remuneration
that purchases Notes from it during the distribution compliance period (within the meaning of
Regulation S) a confirmation or notice to substantially the following effect:
“The Notes covered hereby have not been registered under the U.S. Securities Act of
1933 (the “Act”) and may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons (i) as part of their distribution at any time
or (ii) otherwise until one year after the later of the commencement of the offering
and the date of closing of the offering, except in either case in accordance with
Regulation S or Rule 144A under the Act. Additional restrictions on the offer and sale
of the Notes and the Common Stock issuable upon conversion thereof are described in the
offering memorandum for the Notes. Terms used in this paragraph have the meanings
given to them by Regulation S.”
(i) The Initial Purchasers have complied and will comply with all applicable provisions of
the FSMA with respect to anything done by them in relation to the Notes in, from or otherwise
involving the United Kingdom.
(j) The Initial Purchasers have only communicated or caused to be communicated and will only
communicate or cause to be communicated an invitation or inducement to engage in investment
activity (within the meaning of Section 21 of the FSMA) received by them in connection with the
issue or sale of the Notes in circumstances in which Section 21(1) of the FSMA does not apply to
the Company.
(k) The Initial Purchasers acknowledge that additional restrictions on the offer and
sale of the Notes are described in the Offering Memorandum.
(l) The Initial Purchasers will not offer or sell the Notes in the United States by means of
any form of general solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D, including, but not limited to, (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar medium or broadcast over television
or radio, or (ii) any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising in the United States.
Section 7. Reimbursement of Initial Purchasers’ Expenses.
If this Agreement is terminated by the Representative pursuant to Section 5 or if the sale to
the Initial Purchasers of the Notes on the First Closing Date is not consummated because of any
refusal, inability or failure on the part of the Company to perform any agreement herein or to
comply with any provision hereof other than by reason of default by any of the Initial Purchasers,
the Company agrees to reimburse the Representative and the other
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Initial Purchasers (or such
Initial Purchasers as have terminated this Agreement with respect to themselves), severally, upon
demand for all out-of-pocket expenses that shall have been reasonably incurred by the
Representative and the Initial Purchasers in connection with the proposed purchase and the offering
and sale of the Notes, including but not limited to fees and disbursements of counsel, printing
expenses, travel expenses, postage, facsimile and telephone charges.
Section 8. Indemnification.
(a) Indemnification of the Initial Purchasers. The Company agrees to indemnify and hold
harmless each Initial Purchaser, its officers and employees, and each person, if any, who controls
any Initial Purchaser within the meaning of the Securities Act and the Exchange Act against any
loss, claim, damage, liability or expense, as incurred, to which such Initial Purchaser or such
controlling person may become subject, under the Securities Act, the Exchange Act or other federal
or state statutory law or regulation, at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the Company), insofar as
such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based upon any untrue statement or alleged untrue statement of a
material fact contained in the Offering Memorandum (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact, in each case, necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading. The
Company will reimburse each Initial Purchaser and each such controlling person for any and all
expenses (including the fees and disbursements of counsel chosen by Citigroup) as such expenses are
reasonably incurred by such Initial Purchaser or such controlling person in connection with
investigating, defending, settling or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the foregoing indemnity agreement shall not apply to any loss,
claim, damage, liability or expense to the extent, but only to the extent, arising out of or based
upon any untrue statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the Company by the Initial
Purchasers expressly for use in the Offering Memorandum (or any amendment or supplement thereto).
The Company hereby acknowledges that the only information that the Initial Purchasers have
furnished to the Company expressly for use in the Offering Memorandum (or any
amendment or supplement thereto) are the statements set forth in Schedule B. The indemnity
agreement set forth in this Section 8(a) shall be in addition to any liabilities that the Company
may otherwise have.
(b) Indemnification of the Company, its Directors and Officers. Each Initial Purchaser
agrees, severally and not jointly, to indemnify and hold harmless the Company, each of its
directors, each of its officers and each person, if any, who controls the Company within the
meaning of the Securities Act or the Exchange Act, against any loss, claim, damage, liability or
expense, as incurred, to which the Company, or any such director, officer or controlling person may
become subject, under the Securities Act, the Exchange Act, or other federal or state statutory law
or regulation, at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Initial Purchaser), insofar as such loss,
claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises
out of or is based upon any untrue or alleged untrue statement of a material fact contained in the
Offering Memorandum (or any
amendment or supplement thereto), or arises out of or is based upon the
omission or alleged omission to state therein a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Offering Memorandum (or any
20
amendment or supplement
thereto), in reliance upon and in conformity with written information furnished to the Company by
the Initial Purchasers expressly for use therein; and to reimburse the Company, or any such
director, officer or controlling person for any legal and other expense reasonably incurred by the
Company, or any such director, officer or controlling person in connection with investigating,
defending, settling or paying any such loss, claim, damage, liability, expense or action. The
Company hereby acknowledges that the only information that the Initial Purchasers have furnished to
the Company expressly for use in the Offering Memorandum (or any amendment or supplement thereto)
are the statements set forth in Schedule B. The indemnity agreement set forth in this Section 8(b)
shall be in addition to any liabilities that each Initial Purchaser may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly after receipt by an
indemnified party under this Section 8 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof may be made against an indemnifying party
under this Section 8, notify the indemnifying party in writing of the commencement thereof, but the
omission so to notify the indemnifying party will not relieve it from any liability which it may
have to any indemnified party for contribution or otherwise than under the indemnity agreement
contained in this Section 8 or to the extent it is not prejudiced as a proximate result of such
failure. In case any such action is brought against any indemnified party and such indemnified
party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be
entitled to participate in, and, to the extent that it shall elect, jointly with all other
indemnifying parties similarly notified, by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that a conflict may arise between the positions
of the indemnifying party and the indemnified party in conducting the defense of any such action or
that there may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the indemnified party or
parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise participate in the
defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from
the indemnifying party to the indemnified party of such indemnifying party’s election so to assume
the defense of such action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense thereof unless (i)
the indemnified party shall have employed separate counsel in accordance with the proviso to the
next preceding sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel (together with local counsel), approved
by the indemnifying party (Citigroup in the case of Section 8(b) and Section 9), representing the
indemnified parties who are parties to such action) or (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the indemnified party within a
reasonable time after notice of commencement of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying party.
(d) Settlements. The indemnifying party under this Section 8 shall not be liable for any
settlement of any proceeding effected without its written consent, but if settled with such consent
or if there is a final judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have validly requested an indemnifying party to reimburse the indemnified party for
21
fees and expenses of counsel as contemplated by Section 8(c) hereof, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party
of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified
party in accordance with such valid request prior to the date of such settlement. No indemnifying
party shall, without the prior written consent of the indemnified party, effect any settlement,
compromise or consent to the entry of judgment in any pending or threatened action, suit or
proceeding in respect of which any indemnified party is or could have been a party and indemnity
was or could have been sought hereunder by such indemnified party, unless such settlement,
compromise or consent (x) includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or proceeding and (y) does not
include a statement as to or an admission of fault, culpability or a failure to act by or on behalf
of any indemnified party.
Section 9. Contribution.
If the indemnification provided for in Section 8 is for any reason held to be unavailable to
or otherwise insufficient to hold harmless an indemnified party in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then each indemnifying party shall contribute
to the aggregate amount paid or payable by such indemnified party, as incurred, as a result of any
losses, claims, damages, liabilities or expenses referred to therein (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one hand, and the
Initial Purchasers, on the other hand, from the offering of the Notes pursuant to this Agreement or
(ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company, on the one hand, and the Initial Purchasers, on
the other hand, in connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company, on the one hand, and the Initial Purchasers, on the other hand,
in connection with the offering of the Notes pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of the Notes pursuant
to this Agreement (before deducting expenses) received by the Company, and the total discount
received by the Initial Purchasers bear to the aggregate initial offering price of the Notes. The
relative fault of the Company, on the one hand, and the Initial Purchasers, on the other hand,
shall be determined by reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material fact or any such
inaccurate or alleged inaccurate representation or warranty relates to information supplied by the
Company, on the one hand, or the Initial Purchasers, on the other hand, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such untrue
statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the limitations set forth in
Section 8(c), any legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim. The provisions set forth in Section 8(c) with
respect to notice of commencement of any action shall apply if a claim for contribution is to be
made under this Section 9; provided, however, that no additional notice shall be required with
respect to any action for which notice has been given under Section 8(c) for purposes of
indemnification.
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The Company and the Initial Purchasers agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable considerations referred to in
this Section 9.
Notwithstanding the provisions of this Section 9, no Initial Purchaser shall be required to
contribute any amount in excess of the amount by which the total price at which the Notes purchased
by it and distributed to investors were offered to investors exceeds the amount of any damages
which such Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Initial Purchasers’
obligations to contribute pursuant to this Section 9 are several, and not joint, in proportion to
their respective commitments as set forth opposite their names in Schedule A. For purposes
of this Section 9, each officer and employee of an Initial Purchaser and each person, if any, who
controls an Initial Purchaser within the meaning of the Securities Act and the Exchange Act shall
have the same rights to contribution as such Initial Purchaser, and each director of the Company,
each officer of the Company, and each person, if any, who controls the Company within the meaning
of the Securities Act and the Exchange Act shall have the same rights to contribution as the
Company.
Section 10. Default of One or More of the Several Initial Purchasers.
If, on the First Closing Date or the Second Closing Date, as the case may be, any one or more
of the several Initial Purchasers shall fail or refuse to purchase Notes that it or they have
agreed to purchase hereunder on such date, and the aggregate principal amount of Notes which such
defaulting Initial Purchaser or Initial Purchasers agreed but failed or
refused to purchase does not exceed 10% of the aggregate principal amount of the Notes to be
purchased on such date, the other Initial Purchasers may make arrangements satisfactory to the
Company for the purchase of such Notes by other persons, including any of the Initial Purchasers,
but if no such arrangements are made by such Closing Date, the other Initial Purchasers shall be
obligated, severally, in the proportions that the principal amount of Firm Notes set forth opposite
their respective names on Schedule A bears to the aggregate principal amount of Firm Notes
set forth opposite the names of all such non-defaulting Initial Purchasers, or in such other
proportions as may be specified by the Representative with the consent of the non-defaulting
Initial Purchasers, to purchase the Notes which such defaulting Initial Purchaser or Initial
Purchasers agreed but failed or refused to purchase on such date. If, on the First Closing Date or
the Second Closing Date, as the case may be, any one or more of the Initial Purchasers shall fail
or refuse to purchase Notes and the aggregate principal amount of Notes with respect to which such
default occurs exceeds 10% of the aggregate principal amount of Notes to be purchased on such date,
and arrangements satisfactory to the Representative and the Company for the purchase of such Notes
are not made within 48 hours after such default, this Agreement shall terminate without liability
of any party (other than a defaulting Initial Purchaser) to any other party except that the
provisions of Section 4, Section 8 and Section 9 shall at all times be effective and shall survive
such termination. In any such case either the Representative or the Company shall have the right
to postpone the First Closing Date or the Second Closing Date, as the case may be, but in no event
for longer than seven days in order that the required changes, if any, to the Offering Memorandum
or any other documents or arrangements may be effected.
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As used in this Agreement, the term “Initial Purchaser” shall be deemed to include any person
substituted for a defaulting Initial Purchaser under this Section 10. Any action taken under this
Section 10 shall not relieve any defaulting Initial Purchaser from liability in respect of any
default of such Initial Purchaser under this Agreement.
Section 11. Termination of this Agreement.
On or prior to the First Closing Date this Agreement may be terminated by the Representative
by notice given to the Company if at any time (i) trading in any of the Company’s securities shall
have been suspended or limited by the Commission or by the New York Stock Exchange, or trading in
securities generally on either the Nasdaq National Market or the New York Stock Exchange shall have
been suspended or limited, or minimum or maximum prices shall have been generally established on
any of such stock exchanges by the Commission or the NASD; (ii) a general banking moratorium shall
have been declared by any federal or New York state authority; or (iii) there shall have occurred
any outbreak or escalation of national or international hostilities or any crisis or calamity, or
any change in the United States or international financial markets, or any substantial change or
development involving a prospective substantial change in United States’ or international
political, financial or economic conditions, as in the judgment of the Representative is material
and adverse and makes it impracticable to market the Notes in the manner and on the terms described
in the Offering Memorandum or to enforce contracts for the sale of securities; or (iv) in the
judgment of the Representative there shall have occurred any Material Adverse Change. Any
termination pursuant to this Section 11 shall be without liability on the part of (a) the Company
to any Initial Purchaser, except that the Company shall be obligated to reimburse the expenses of
the Representative and the Initial Purchasers pursuant to Section 4 hereof, (b) any Initial
Purchaser to the Company, or (c) of any party hereto to any other party except that the provisions
of Section 8 and Section 9 shall at all times be effective and shall survive such termination.
Section 12. Representations and Indemnities to Survive Delivery.
The respective indemnities, contribution, representations, warranties and other statements of
the Company or its officers and of the Initial Purchasers set forth in or made pursuant to this
Agreement shall remain operative and in full force and effect, regardless of (i) any investigation,
or statement as to the result hereof, made by or on behalf of any Initial Purchaser or the Company
or any of its or their partners, officers or directors or any controlling person, as the case may
be, (ii) acceptance of the Notes and payment for them hereunder and (iii) any termination of this
Agreement.
Section 13. Notices.
All communications hereunder shall be in writing and shall be mailed, hand delivered or
telecopied and confirmed to the parties hereto as follows:
If to the Representative:
Citigroup Global Markets Inc.,
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: General Counsel
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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If to the Company:
Maxtor Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
Milpitas, CA 95035
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
Milpitas, CA 95035
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to:
Maxtor Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
with a copy to:
DLA ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ US LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-2248
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-2248
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
Any party hereto may change the address for receipt of communications by giving written notice
to the others.
Section 14. Successors.
This Agreement will inure to the benefit of and be binding upon the parties hereto, including
any substitute Initial Purchasers pursuant to Section 10 hereof, and to the benefit of the
employees, officers and directors and controlling persons referred to in Section 8 and Section 9,
and in each case their respective successors, and no other person will have any right or obligation
hereunder. The term “successors” shall not include any purchaser of the Notes as such from any of
the Initial Purchasers merely by reason of such purchase.
Section 15. Partial Unenforceability.
The invalidity or unenforceability of any Section, paragraph or provision of this Agreement
shall not affect the validity or enforceability of any other Section, paragraph or provision
hereof. If any Section, paragraph or provision of this Agreement is for any reason determined to
be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such
minor changes) as are necessary to make it valid and enforceable.
Section 16. Governing Law Provisions.
This Agreement shall be governed by and construed in accordance with the laws of the State of
New York without regard to principles of conflicts of laws.
25
The Company hereby submits to the non-exclusive jurisdiction of the Federal and state courts
in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby.
Section 17. General Provisions.
This Agreement constitutes the entire agreement of the parties to this Agreement and
supersedes all prior written or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof. This Agreement may be executed in two or
more counterparts, each one of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This Agreement may not be amended or
modified unless in writing by all of the parties hereto. The Table of Contents and the Section
headings herein are for the convenience of the parties only and shall not affect the construction
or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated business person who was
adequately represented by counsel during negotiations regarding the provisions hereof, including,
without limitation, the indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Sections 8 and 9 hereto fairly allocate the risks in light of
the ability of the parties to investigate the Company, its affairs and its business in order to
assure that adequate disclosure has been made in the Offering Memorandum (and any amendments and
supplements thereto), as required by the Securities Act and the Exchange Act.
Section 18. No Fiduciary Duty
The Company hereby acknowledges that (a) the Initial Purchasers are acting as principal and
not as agents or fiduciaries of the Company and (b) its engagement of the
Initial Purchasers in connection with the Offering is as independent contractors and not in
any other capacity. Furthermore, the Company agrees that it is solely responsible for making its
own judgments in connection with the Offering (irrespective of whether any of the Initial
Purchasers has advised or is currently advising the Company on related or other matters).
26
If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to the Company the enclosed copies hereof, whereupon this instrument, along with all
counterparts hereof, shall become a binding agreement in accordance with its terms.
| MAXTOR CORPORATION |
||||
| By: | /s/ C.S. Park | |||
| Name: | ▇▇. ▇.▇. ▇▇▇▇ | |||
| Title: | Chairman and Chief Executive Officer | |||
The foregoing Purchase Agreement is hereby confirmed and accepted by the Representative
as of the date first above written.
CITIGROUP GLOBAL MARKETS INC.
Acting as Representative of the
several Initial Purchasers named in
the attached Schedule A.
Acting as Representative of the
several Initial Purchasers named in
the attached Schedule A.
| CITIGROUP GLOBAL MARKETS INC. | ||||||
| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. | |||||
| Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. | ||||||
| Title: | Vice President | |||||
27
CITIGROUP GLOBAL MARKETS INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
August 26, 2005
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
General Counsel
Maxtor Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
General Counsel
Maxtor Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇. ▇▇▇▇▇▇▇:
Reference is made to the Purchase Agreement, dated as of August 9, 2005, by and between Maxtor
Corporation, a Delaware corporation (the “Company”), and Citigroup Global Markets Inc., as
representative of itself, ▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated and ▇▇▇▇▇▇▇, ▇▇▇▇▇ &
Co. (the “Purchase Agreement”). All capitalized terms used herein which are not defined herein
have the meanings given to such terms in the Purchase Agreement.
The reference in the table of contents of the Purchase Agreement to “The Optional Notes; the
Second Closing Date” is amended to read “The Optional Notes; Optional Closing Dates.”
Section 2(c) of the Purchase Agreement is amended and restated as follows:
(a) The Optional Notes; Optional Closing Dates. In addition, on the basis of the
representations, warranties and agreements herein contained, and upon the terms but subject to the
conditions herein set forth, the Company hereby grants an over-allotment option to the several
Initial Purchasers to purchase, severally and not jointly, up to $45,000,000 aggregate principal
amount of Optional Notes from the Company in the respective principal amounts set forth opposite
their name under the heading “Aggregate Principal Amount of Optional Notes Allocated” on Schedule A
and at a purchase price of 97.75% of the aggregate principal amount thereof. The over-allotment
option granted hereunder may be exercised one or more times upon notice by the Representative to
the Company, which notice or notices may be given at any time within 30 days from the date of this
Agreement. Any such notice shall set forth (i) the amount (which shall be an integral multiple of
$1,000 in aggregate principal amount) of Optional Notes as to which the Initial Purchasers are
exercising the over-allotment option, (ii) the names and denominations in which the Optional Notes
are to be registered and (iii) the time, date and place at which such Notes subject to such
exercise will be delivered (which time and date may be simultaneous with, but not earlier than, the
First Closing Date; and in such case the term “First Closing Date” shall refer to the time and date
of delivery of the Firm Notes and the Optional Notes). Any such time and date of delivery, if
subsequent to the First Closing Date, is called an “Optional Closing Date” and shall be
reasonably determined by the Representative. Such date may be the same as the First Closing
Date but not earlier than the First Closing Date nor later
than 10 business days after the date of
such notice. Upon each purchase of Optional Notes, each Initial Purchaser agrees, severally and
not jointly, to purchase the principal amount of Optional Notes (subject to such adjustments to
eliminate fractional amounts as the Representative may determine) that bears the same proportion to
the total principal amount of Optional Notes to be purchased as the principal amount of Firm Notes
set forth on Schedule A opposite the name of such Initial Purchaser bears to the total principal
amount of Firm Notes. The Representative may cancel the over-allotment option at any time prior to
its expiration by giving written notice of such cancellation to the Company.
Except as otherwise amended hereby, the Purchase Agreement is amended to replace all
references to “the Second Closing Date” and “Second Closing Date” to “any Optional Closing Date”
and “Optional Closing Date,” respectively, which term shall refer to that particular Optional
Closing Date for which a notice pursuant to Section 2(c) of the Purchase Agreement (as amended
hereby) is given.
In addition, pursuant to Section 2(c) of the Purchase Agreement (as amended hereby), we hereby
notify you that the Initial Purchasers are exercising their option to purchase $26,000,000
aggregate principal amount of Optional Notes to cover over-allotments.
The closing date for the purchase of the Optional Notes referenced in the preceding sentence
will be August 31, 2005.
| Very truly yours, | ||||
| Citigroup Global Markets Inc. Acting as Representative of the several Initial Purchasers named in Schedule A to the Purchase Agreement | ||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ | |||
| Title: | Director | |||
The foregoing agreement is hereby confirmed
and accepted as of the date first above
written.
and accepted as of the date first above
written.
| Maxtor Corporation | ||||
By:
|
/s/ C.S. Park | |||
| Title: Chairman and Chief Executive Officer | ||||